Survey shows potential for 25 million Verizon iPhones in 2011

Pent up demand for an iPhone capable of working on Verizon Wireless could result in as many as 25 million new subscribers for the carrier this year, based on interest expressed by US mobile users on all four major mobile providers.

After being the hot rumor for years, the Verizon iPhone is finally nearing availability. Analysts' expectations for sales have been low across the board however, ranging from guess of 9 to 12 million sales.

However, William Power, an analyst with RW Baird & Co., has reported the potential for 25 million, cautioning, in a report by Wall Street Journal blogger John Paczkowski, that this is a "directional" number and not a prediction, because it depends on subscribers' eligibility and would be constrained by Apple's ability to produce enough handsets.

The number is based on a survey of 1,000 smartphone users across the four major carriers. Most of the number comes from existing Verizon customers, including 25 percent of its current smartphone users (4.8 million) and 29 percent of its feature phone users (19 million) who say they will "probably" or "definitely" switch, resulting in a total of 24.8 million likely buyers within Verizon's existing fold.

Interestingly, just 5.6 percent of AT&T's existing iPhone users (less than 2 million) reported that they were interested in switching to Verizon, contradicting the popular notion that most or at least a large portion of Verizon's iPhone customers will be existing iPhone users jumping ship from AT&T.

How iPhone 4 will impact US carriers

AT&T itself has expressed confidence that relatively few of its iPhone users will switch, in part because of being involved in family or business plans that are difficult to change. AT&T also offers faster data service and some features (such as simultaneous voice and data, and global roaming) that are not possible on Verizon's network with the new CDMA iPhone 4, at least for users who live in spots where AT&T offers good coverage.

Across all carriers, it's interesting to note that only 11 percent of Verizon's smartphone customers responded that they would "definitely not" or "probably not" get the new iPhone 4, while half of AT&T users, 54 percent of T-Mobile users, and 78 percent of Sprint smartphone users were similarly negative.

Both Sprint and T-Mobile are focused on selling their new high speed data services, yet a report by the New York Times indicated that a very small percentage of subscribers are paying for smartphones.

According to data from the CTIA trade group, AT&T has the most smartphone users, despite having slightly fewer total subscribers compared to Verizon. AT&T has only a sliver of Android users, in part because it has historically only carried a very low end model, and in part because it has the iPhone.

Verizon has the largest number of US Android subscribers, serving nearly half of Google's platform in the US. With Verizon poised to direct its resources toward replicating AT&T's success in converting more of its feature phone users into smartphone users, this portion of the Android installed base is likely to erode quickly.

That leaves Sprint and T-Mobile as the two largest US carriers without (currently) an iPhone they can sell, and thus reliant on Android and other smartphone platforms to drive data subscriptions and pay for their efforts to build out fast new data networks.

iPhone 5 everywhere?

But with Android getting squashed on Verizon, Sprint and T-Mobile will be left with a platform as obscure as their 4G wireless technologies. Sprint is alone in pushing WiMAX, while T-Mobile is building out HSPA+, albeit on radio frequencies unlike most other carriers globally, and incompatible with the existing iPhone.

However, Sprint, like Verizon, can already sell the existing CDMA iPhone 4, something Apple appears to have alluded to in its careful notation that its deal with Verizon was "non-exclusive," something that was already obvious given that AT&T isn't losing its iPhone relationship.

Additionally, with Apple expected to move to a Qualcomm "world mode" baseband processor in iPhone 5 and iPad 2, it's more likely than ever that the company will soon be able to support T-Mobile's unique 3G frequencies (now being branded as "4G" because they're now operating faster than early "transitional 4G" networks such as the LTE now being built by Verizon), making it potentially possible (pending carrier agreements) to ship the iPhone across all four major US networks.

Such a move would erase Android's ability to act as a smartphone driver for data contracts on any network, relegating Google's platform down into competing against Windows Phone 7, Samsung's Bada, and embedded, proprietary platforms (like those used by LG's enV line and most feature phones) for a piece of the low end phone business.

This all happened before

A year ago, a series of analysts all weighed in with very positive comments on the newly unveiled iPad, but their sales expectations were very conservative, ranging from predictions of just 1 to 4 million units being sold in its first year. Apple has already sold 14.7 million iPads in its first three quarters.

However, the ability of iPad to attract users' attentions resulted in every carrier rushing to deliver mobile service MiFi devices it could be used with, some custom designed to only work with Apple products. By last fall, Verizon was already officially carrying the iPad, a harbinger of its widening agreement to pick up a CDMA iPhone 4 a few months later.

The result has been a tally of iPads far beyond what any analyst, or even the most giddy enthusiast, had ever dreamed of predicting.

It is interesting to see all the poll data they are able to spit out, but we are on the verge of getting real numbers to look at. I suspect the polling (and your point of view [mine too]) will be correct, and we will see iPhone users moving broader and deeper in the US smartphone pool, with Android taking a hit in the US. I suspect Android will continue to expand in markets where cost is a higher concern, but the value perception here in the US will knock Android fairly severely.

Another quarter, and we will have hard numbers to gage the situation properly.

Seems like its all bad news all the time for Android these days. Or maybe because I'm reading mostly DED's articles. Or maybe because he's right.

But those numbers, if they are accurate are deadly for Google and the Android handset makers. My sample size of one for instance indicates that 100% of those surveyed does not own a smart phone because T-Mobile doesn't carry the iPhone but as soon as it does, ownership will increase infinite-fold.

Such a move would erase Android's ability to act as a smartphone driver for data contracts on any network, relegating Google's platform down into competing against Windows Phone 7, Samsung's Bada, and embedded, proprietary platforms (like those used by LG's enV line and most feature phones) for a piece of the low end phone business.

No one with half a brain believes this crap. Android will still sell on high end phones with data contracts.

Seems like its all bad news all the time for Android these days. Or maybe because I'm reading mostly DED's articles. Or maybe because he's right.

Android is going to have a tougher time winning customers in the US market, but much of this is DED's spin more than anything based on reality. Android is not static and is still very young. It will keep getting better and it will continue to be Apple's prime competition in the phone space and soon in the tablet space. I am not giving up my iPhones for Android anytime soon, but it is a very strong second place in my book with the others far behind, and who knows how Android and iOS will measure up in 1-2 years. Android could always catch up or even jump ahead, so it pays to keep an open mind.

The problem with that forecast is that Apple won't be able to make that many.

Apple is certainly capable of making 25 million phones in 12 months. The real problem is taking what 1000 people across 4 carriers and looking at the responses of a fraction of them on one carrier SAID they would do, and then projecting that into what millions of people actually WILL do. Many will change their minds in the months ahead for all sorts of reasons. And that is just the "definitely" responders. Probably usually means less than a 50% chance of follow through. Often much less.

I think the 9 million estimates are likely a touch low, but any number over 15 million needs a few grains of salt. Heck the author is still forecasting 10 million while pointing out the survey results could imply 25 million. If the author (William Power) does not believe it, what does that tell you?

What is more interesting is the general agreement that the number of AT&T ship jumpers will be relatively low. Most estimates are 500,000 to 1 million, maybe 1.5 million. They sure are a noisey lot but time will tell how many of them there really are.

The problem with that forecast is that Apple won't be able to make that many.

If that new factory is running at full tilt they can do 200k per day, or 65M units for the 325 days remaining in 2011 from the Verizon launch day. That’s one Foxconn factory. That probably won’t suffice for the entire world’s iPhones for 2011, but it will be a hefty portion of it.

Dick Applebaum on whether the iPad is a personal computer: "BTW, I am posting this from my iPad pc while sitting on the throne... personal enough for you?"

Android is going to have a tougher time winning customers in the US market, but much of this is DED's spin more than anything based on reality. Android is not static and is still very young. It will keep getting better and it will continue to be Apple's prime competition in the phone space and soon in the tablet space. I am not giving up my iPhones for Android anytime soon, but it is a very strong second place in my book with the others far behind, and who knows how Android and iOS will measure up in 1-2 years. Android could always catch up or even jump ahead, so it pays to keep an open mind.

It's not a matter of keeping an open mind, but one of looking at facts. Your "open mind" disregards the facts to keep your opinion blank, but that' isn't as open and bias-free as you think. It's really just a conservative attempt to ignore facts that don't fit your world view so your hopes can be preserved, in tact, without meddlesome contention with the actual facts at hand.

Like Sarah Palin and Michele Bachmann.

Also, to your other "point," the article doesn't say Android won't sell with high end phones at all. It says it Android's inability to sell contracts (as Verizon witnessed last year) will largely relegate it into the role of low end phones. Just like PCs, where Windows is on most things, but most things are cheap sub$500 machines. Most of the high end is owned by Apple, even if there are expensive Windows PCs you can buy.

What is more interesting is the general agreement that the number of AT&T ship jumpers will be relatively low. Most estimates are 500,000 to 1 million, maybe 1.5 million. They sure are a noisey lot but time will tell how many of them there really are.

Excellent observations on human behavior. I expect that the numbers switchig to Verizon from ATT will be MUCH less also, due to the faster data speeds on ATT (which have just been upgraded here in the Bay Area in the last couple of weeks).

Also, I believe that ATT folks will want to see how the Verizon network holds up under the strain, since that has been the whole "reason d'etre" for doing the switch in the first place, and the plan costs are so similar as to make the cost comparisons moot.

Android is going to have a tougher time winning customers in the US market, but much of this is DED's spin more than anything based on reality. Android is not static and is still very young. It will keep getting better and it will continue to be Apple's prime competition in the phone space and soon in the tablet space. I am not giving up my iPhones for Android anytime soon, but it is a very strong second place in my book with the others far behind, and who knows how Android and iOS will measure up in 1-2 years. Android could always catch up or even jump ahead, so it pays to keep an open mind.

I do agree in that if the iPhone never existed, Android would be the only system I would use. I'd just be shaking my head in disgust with the system model being similar to the mess that is Windows. It's a very distant 2nd place choice for me. As long as Apple keeps improving and polishing iOS, they will have me as a happy consumer.

I don't think Android is going anywhere anytime soon. In the worst-case scenario, Google would abandon it for whatever reason, it'll go into the public domain where then everyone would get their hands on it and hack to system so it's only Android by name, but fragmented beyond compatibility.

Apple is certainly capable of making 25 million phones in 12 months. The real problem is taking what 1000 people across 4 carriers and looking at the responses of a fraction of them on one carrier SAID they would do, and then projecting that into what millions of people actually WILL do. Many will change their minds in the months ahead for all sorts of reasons. And that is just the "definitely" responders. Probably usually means less than a 50% chance of follow through. Often much less.

I think the 9 million estimates are likely a touch low, but any number over 15 million needs a few grains of salt. Heck the author is still forecasting 10 million while pointing out the survey results could imply 25 million. If the author (William Power) does not believe it, what does that tell you?

What is more interesting is the general agreement that the number of AT&T ship jumpers will be relatively low. Most estimates are 500,000 to 1 million, maybe 1.5 million. They sure are a noisey lot but time will tell how many of them there really are.

You seem to like saying that opinions have a problem with "follow through," but the same can be said, on the other side, of snowballing momentum. There are far more people buying the iPhone than there were people originally "expressing interest," not the other way around.

That's another fact you don't like because it doesn't support your fundamentalist assertions about the future of Android.

I do agree in that if the iPhone never existed, Android would be the only system I would use. I'd just be shaking my head in disgust with the system model being similar to the mess that is Windows. It's a very distant 2nd place choice for me. As long as Apple keeps improving and polishing iOS, they will have me as a happy consumer.

I don't think Android is going anywhere anytime soon. In the worst-case scenario, Google would abandon it for whatever reason, it'll go into the public domain where then everyone would get their hands on it and hack to system so it's only Android by name, but fragmented beyond compatibility.

If the iPhone never existed, Android would be offering a device equivalent to the 1997 Windows Mobile and Palm Treo phones that it was originally designed to copy. Why anyone would prefer that sort of Android phone to a Treo or BlackBerry is hard to say.

Android is only notable today because Google was quicker to copy Apple than RIM, Palm, and Microsoft. If it hadn't had Apple to copy, there'd be no Android as we know it.

If the iPhone never existed, Android would be offering a device equivalent to the 1997 Windows Mobile and Palm Treo phones that it was originally designed to copy. Why anyone would prefer that sort of Android phone to a Treo or BlackBerry is hard to say.

Android is only notable today because Google was quicker to copy Apple than RIM, Palm, and Microsoft. If it hadn't had Apple to copy, there'd be no Android as we know it.

If the iPhone never existed, Android would be offering a device equivalent to the 1997 Windows Mobile and Palm Treo phones that it was originally designed to copy. Why anyone would prefer that sort of Android phone to a Treo or BlackBerry is hard to say.

Android is only notable today because Google was quicker to copy Apple than RIM, Palm, and Microsoft. If it hadn't had Apple to copy, there'd be no Android as we know it.

I was vague and did a bad assumption. I was going with the assumption that Android would be in its current form.

Yes, Android was in a different form during the pre-iPhone days. Frankly, had it been just like the other players, I'd probably still be using a regular cell phone.

... If it hadn't had Apple to copy, there'd be no Android as we know it.

Yes, one fact that a lot of people seem to ignore is that their are two smartphone OSs called Android. There's the pre-iPhone, BB/Treo clone OS that was abandoned after the iPhone was released and never made it into the wild. Then, there's the post-iPhone Android that is available today. Two different OSs, one name, seems to cause a lot of confusion for a lot of people

It's not a matter of keeping an open mind, but one of looking at facts. Your "open mind" disregards the facts to keep your opinion blank, but that' isn't as open and bias-free as you think. It's really just a conservative attempt to ignore facts that don't fit your world view so your hopes can be preserved, in tact, without meddlesome contention with the actual facts at hand.

Like Sarah Palin and Michele Bachmann.

Also, to your other "point," the article doesn't say Android won't sell with high end phones at all. It says it Android's inability to sell contracts (as Verizon witnessed last year) will largely relegate it into the role of low end phones. Just like PCs, where Windows is on most things, but most things are cheap sub$500 machines. Most of the high end is owned by Apple, even if there are expensive Windows PCs you can buy.

What the hell is wrong with you? Saying that I will keep an open mind about Android in the next couple of years even though I like the iPhone now is some how in contention with the facts? And then pulling in conservatism and politics? Dude, you need to get off the internet and go find a shrink. FAST!

You seem to like saying that opinions have a problem with "follow through," but the same can be said, on the other side, of snowballing momentum. There are far more people buying the iPhone than there were people originally "expressing interest," not the other way around.

That's another fact you don't like because it doesn't support your fundamentalist assertions about the future of Android.

A rational look at the outlook for the industry is "fundamentalist"? I own an iPhone, I still recomend it over Android to anyone who asks my opinion. I am hardly an Android fanboy, but I am educated on the industry, and business and marketing in general, and I see 25 million verizon iphones in 2011 as extremely unlikely, as does EVERYONE else with a clue who has looked at the data. You don't see Verizon or Apple prediciting those numbers either.

Why? Only 2% of the AT&T customers with unlimited data used more than 2gb/month. I doubt the Verizon customers will be any bigger data hogs. Plus, the unlimited data is for a limited time. Verizon will likely cut that long before the 25 million phones are sold.

A rational look at the outlook for the industry is "fundamentalist"? I own an iPhone, I still recomend it over Android to anyone who asks my opinion. I am hardly an Android fanboy, but I am educated on the industry, and business and marketing in general, and I see 25 million verizon iphones in 2011 as extremely unlikely, as does EVERYONE else with a clue who has looked at the data. You don't see Verizon or Apple prediciting those numbers either.

If the iPhone never existed, Android would be offering a device equivalent to the 1997 Windows Mobile and Palm Treo phones that it was originally designed to copy. Why anyone would prefer that sort of Android phone to a Treo or BlackBerry is hard to say.

Android is only notable today because Google was quicker to copy Apple than RIM, Palm, and Microsoft. If it hadn't had Apple to copy, there'd be no Android as we know it.

Well said, although the android apologists still cannot get this simple FACT through their thick skulls. The arrogance and audacity of the original poster is bone chilling.
The current Android phone is a very poor copy (quality wise) of the iPhone, this is FACT, their original phone looked like a typical blackberry, this is also FACT.
Its amazing how many of these android fans still believe that Apple copied them and not the other way around. Truly amazing.

Quote: If you cannot innovate you copy, but you copy badly because you never innovated in the first place.

I do agree in that if the iPhone never existed, Android would be the only system I would use. I'd just be shaking my head in disgust with the system model being similar to the mess that is Windows. It's a very distant 2nd place choice for me. As long as Apple keeps improving and polishing iOS, they will have me as a happy consumer.

I don't think Android is going anywhere anytime soon. In the worst-case scenario, Google would abandon it for whatever reason, it'll go into the public domain where then everyone would get their hands on it and hack to system so it's only Android by name, but fragmented beyond compatibility.

That's what is probably most worrying, or should be from the standpoint of an Android developer. In much the same way as the iPhone was a "happy accident" on the way to developing the iPad, Android seems to have been conceived as a placeholder for Chromium, and may well be ditched in favour of Google's real vehicle for its Cloud strategy. Having secured its position in the mobile advertising world with the acquisition of AdMob, Android may well be viewed by Google as a bonus asset to be discarded as soon as any suggestions arise that it may become a liability (e.g. the Oracle-JavaME litigation).

The worst-case scenario as described above may well come to pass, but in that case the greater benefit would accrue to JavaME, to which developers would most probably return with the rich toolset methodology gleaned from Android.